Marketing Flashcards
What is branding
Branding: A way of making your product stand out from competition by using a particular colour, slogan, logo etc
What is market research
Market Research: Collecting and analysing information on the market
What is competing firms
Competing Firms: Other firms in the same industry selling similar goods or services
What is marketing
Marketing: The process of getting the right product to the right people in the right place at the right price
What is promotion
Promotion: Informing potential consumers about your product and persuading them that they want to buy it
What are channels of distribution
Channels of Distribution: The way in which goods will be available to the customers – how they will get the goods to customers; for example, directly or through wholesalers
What is marketing mix
Marketing Mix: The term used to describe the marketing choices made by a firm regarding product, price, place and promotion
What is marketing plan
Marketing Plan: A part of a formal business plan which outlines how the firm will get the right good/service to the right people in the right way
Difference between Advertising and Marketing
Marketing is the combantion of the 4P’s in order to help a consumer make a Purchasing decision. Where as buying and selling is just one aspect of a marketing Strategy.
Advertising is a part of marketing and it is used to create brand awareness and is a part of making a buyer buy a company’s product
What is segmentation
The process of dividing your market into a distinct group of consumers i.e. targeting
Females 25-35
Middle Income
Healthy Lifestyle
Diet Coke
What is unique selling point USP
Something different and special about your service and product that makes people choose it over your competition
What is Product in the 4ps
This is the “thing” that companies sell in order to make a profit – it can be a product or a service (phones)
What is the product life cycle
Introduction stage – The product is not officially on the market at this stage. Sales will start to grow slowly because of low product awareness – No profits at this stage. Introduction advertising is word of mouth – people telling others
Growth – sales start to grow rapidly supported by advertising. Profits start to be made. Competitors may enter the market with very similar offerings. Advertising spending is high and focuses upon building the brand.
Maturity – sales increase slowly now due to intense competition. A lot of advertising is used to maintain sales growth. Price wars and intense competition occur. Producers and companies begin to leave the market due to poor profit margins.
Decline – sales will decline as new products come along or the product has lost its appeal. The product will usually be withdrawn from the market as it becomes unprofitable to produce the product any further.
What is Price in 4ps and why do we have pricing strategies
Price is what the business charges for a product or service. A business can adopt different pricing strategies for several reasons
Try to break into a new market
To try to increase its market share
To try to increase its profits
To make sure all its costs are covered and a certain profit is earned.
Process of pricing a service/product
There are many steps to work through
Select the objectives for sales – know how much you want to sell
Estimate demand
Estimates costs of creating your product/service
Analyse competitors prices
Select a pricing method
Select the final price.
Decide on pricing strategies
What are the pricing strategies
Cost-Plus Pricing
Involves estimating how many of the product will be produced, then calculating the total cost of producing this product and finally adding a percentage increase for profit
Advantages and disadvantages
Is easy to calculate
Possible loss of sales if the selling price is a lot higher than your competitor’s price.
Penetration Pricing
Strategy used when competitors have entered the market or are already in the market
Price is set low with the aim of establishing market-share for the product
Profits will be modest
With experience of production savings will be made, resulting in a higher profit margin.
Price Skimming
Strategy used for new products. Typically done by large companies that are well known
Price is set high (initially) to recover costs of research and development
Useful when competitors are not expected to enter market for a while
High price appropriate when a firm/product have a unique advantage
Competitive Pricing
Prices are set in line with your competitors or just below their prices. Examples = coke and Pepsi, similar products so prices are the same generally if there are not discounts. Always used for companies selling the same or similar product but with a different brand.
Sales are likely to be high as your price is at a realistic price level and the product is not under or over-priced
In order to decide what the price should be, you would have to research what price competitor are charging which costs time and money.
Promotional Pricing
Products are packaged together and sold at a price that is lower than the combined price of the products
Customers are encouraged to buy more
Customers perceive the “products” as being good value.
Generally done with small companies that are not as well-known and are trying to make a name for themselves.
They are generally done if the products put in the pack are not as good as their other products and cannot be sold so they are put in a pack with products that do sell so they can get rid of it while making a profit.
Promotional pricing makes you buy more of their products so they can get rid of it but profits are much lower.
Psychological Pricing
Price based on value placed on the item by consumers and amount they are likely to pay for it.
Price may reflect “Quality” or “Less expensive”
High price tags indicates higher quality
Used to trick the customer into thinking their expensive product is better than their cheaper product to make more profit.
What is place in the 4ps
Place is about where your product will be distributed and sold. Place is where the customer can find your product or service. The place where you chose to sell your product must be appropriate in relation to cost and competition.
What are distribution channels
Distribution Channels is how a product or service gets from the seller to the buyer. A distribution channel can have several stages depending on how many intermediaries (supermarkets, retailers) are involved in the chain – wholesalers, retailers, agencies, distributors.
Selling directly to consumers
Producer ———————————————–> Consumer
Selling through retailers
Producer —————————————> Retailer————-> Consumer
Producer ———-> Wholesaler———–> Retailer————-> Consumer
Producer —–> Agent —–> Wholesaler —–> Retailer —–> Consumer
What is promotion in 4ps
Promoting your product and service to build brand awareness and become more popular
What is target market and what is it seperated into
A target market is a group of customers that the business has decided to aim its marketing efforts at
Geographic – their location
Demographic – gender, age, income, occupation, education, household size
Psychographic – attitudes, values, lifestyles and religious values
What is advertising, what are its methods and aims
Advertising is non-personal communication by the business to the target market. The business does not connect with the consumer.
Methods of Advertising are
Newspapers/Magazines
Radio
Television
Outdoor Displays – billboards
Direct mail – Letters, email
Online – Social Media
Aims of Advertising
To increase sales
To build brand awareness
To reach new target market
To persuade
To remind people they are still in the market
What is sales promotion, its aim and methods
Sales promotion involves short-term tactics used to achieve sales. Methods of sales promotion are price reductions, samples, coupons, competitions and gifts with purchases.
Aims of Sale Promotion
To increase sales
Increase shelf space allocated by retailers to a brand’s display
What are public relations, its aim and methods
Public relations include sponsorships and newsletters that create a feeling of goodwill around a product or service being promoted
Methods of Public Relations
Publicity - new items planted by the producer about an item or even in order to gain publicity.
Sponsorship - sponsorship of major events are an opportunity to create a favorable public image making people more inclined to buy the product.
Newsletters or magazines - allow a firm to communicate with staff, customers and suppliers. Magazine may write good reviews building better brand awareness and favorable public image.
Trade shows - business to business events attended by businesses in a specific market such as beauty, software, architecture and medical trade shows to show off new products and services
What is personal selling
Personal selling is face-to-face communication that attempts to inform and persuade others to purchase the goods of the seller. Example is door to door selling.
Methods of personal selling
Door to door sales
What is cost plus pricing
Cost-Plus Pricing
Involves estimating how many of the product will be produced, then calculating the total cost of producing this product and finally adding a percentage increase for profit
Advantages and disadvantages
Is easy to calculate
Possible loss of sales if the selling price is a lot higher than your competitor’s price.
What is penetration pricing
Penetration Pricing
Strategy used when competitors have entered the market or are already in the market
Price is set low with the aim of establishing market-share for the product
Profits will be modest
With experience of production savings will be made, resulting in a higher profit margin.
What is price skimming
Price Skimming
Strategy used for new products. Typically done by large companies that are well known
Price is set high (initially) to recover costs of research and development
Useful when competitors are not expected to enter market for a while
High price appropriate when a firm/product have a unique advantage
What is competitive pricing
Competitive Pricing
Prices are set in line with your competitors or just below their prices. Examples = coke and Pepsi, similar products so prices are the same generally if there are not discounts. Always used for companies selling the same or similar product but with a different brand.
Sales are likely to be high as your price is at a realistic price level and the product is not under or over-priced
In order to decide what the price should be, you would have to research what price competitor are charging which costs time and money.
What is promotional pricing
Promotional Pricing
Products are packaged together and sold at a price that is lower than the combined price of the products
Customers are encouraged to buy more
Customers perceive the “products” as being good value.
Generally done with small companies that are not as well-known and are trying to make a name for themselves.
They are generally done if the products put in the pack are not as good as their other products and cannot be sold so they are put in a pack with products that do sell so they can get rid of it while making a profit.
Promotional pricing makes you buy more of their products so they can get rid of it but profits are much lower.
What is psychological pricing
Psychological Pricing
Price based on value placed on the item by consumers and amount they are likely to pay for it.
Price may reflect “Quality” or “Less expensive”
High price tags indicates higher quality
Used to trick the customer into thinking their expensive product is better than their cheaper product because it is off better quality since more expensive.
